Cycurion to merge with SPAC Western Acquisition Ventures Corp. (NASDAQ:WAVS) in a deal worth $170M, combining two growing firms in the cybersecurity industry to create an enterprise valued at $170M, including debt of $0.3M and equity of $169M. The combined company will be renamed Cycurion Technologies, Inc. and will trade on the NASDAQ under the ticker symbol CURX upon closing of the merger.
Cycurion to Merge with SPAC Western Acquisition Ventures
The cybersecurity firm Cycurion has announced that they plan on merging with the SPAC Western Acquisition Ventures.
This merger will create an enterprise value of $170M and will go public through this merger. This merger was brought about by the uncertainty in the current market and Cycurion’s need for outside capital to keep up their growth. The company is expected to generate sales of about $12 million by 2020.
The cybersecurity firm Cycurion is ranked as the 61st fastest growing private company in North America according to Deloitte’s 2018 Technology Fast 500 program.
They had revenue growth of 2,938% over the past three years. They are expecting to grow even more with this merger which would be one of their biggest successes yet.
A cybersecurity firm from Ohio called Cycurion is now set to merge with SPAC Western Acquisition Ventures Corp (NASDAQ:WAVS).
It’s been reported that if the merged company goes public it will have an enterprise value of around $170M and would join other big companies like Sony and Delta Airlines on the NASDAQ stock exchange. If all goes well, we can expect them to produce around $12 million in annual revenue by 2020.
With their recent acquisition of Vectra Networks at the end of last year and this new venture, it seems clear that Cycurion is committed to continuing its growth.
Cybersecurity firms will always be needed because cyber-attacks are becoming increasingly common.
With the uncertain market and Cycurion’s need for outside capital, this merger could help them succeed in producing security software as well as hardware to protect data centers, networks, and infrastructure against cyber threats such as malware, ransomware, advanced persistent threats (APTs), supply chain attacks, nation-state attacks or insider threats.
The Deal
This week Cygurion has announced their plans to merge with SPAC Western Acquisition Ventures.
The combined company will have an estimated enterprise value of $170 million. Cygurion is a cybersecurity company that provides solutions for data protection, malware detection and prevention and cloud-based security.
The company’s solutions are deployed by more than 1,500 customers in the United States and Canada including Fortune 1000 enterprises and government agencies.
The merger will create an elite cybersecurity firm that can serve large companies as well as government agencies at any scale.
With this merger, WAVS will own 100% of the new combined company which it will rename Cycurion Technologies.
The merger also allows both firms to offer cybersecurity solutions through WAVS’ existing sales channels and partnerships while offering its clients better insight into threats they face.
It also adds capabilities in information systems auditing, penetration testing and vulnerability assessment which helps organizations identify flaws before they lead to breaches or other disasters.
Cygurcon currently operates out of Pittsburgh and Reston Virginia but WAVS says the new headquarters will be determined later this year.
In 2017, Cygurcon reported revenue of $13.7 million. The cybersecurity market is projected to reach nearly $200 billion by 2020 according to International Data Corporation (IDC) Worldwide Semiannual Cybersecurity Spending Guide 2018.
There’s a need for cybersecurity services because not only do hackers continuously devise new ways to steal information, there are also hardware failures due to technical vulnerabilities like Spectre and Meltdown.
Hackers use these vulnerabilities in combination with social engineering techniques like phishing attacks and malware downloads like ransomware in order infiltrate networks and steal sensitive data or deny service availability.
A cyberattack on Yahoo! led 500 million people’s personal data being stolen from 2014-2016 which included email addresses, passwords, phone numbers and birthdates.
What Does This Mean?
Cybersecurity firm Cycurion is merging with SPAC Western Acquisition Ventures and going public in order to create a $170 million enterprise.
The merger will provide the company with the opportunity for growth and expansion through capital.
Cycurion plans on using this money to fund the development of new products and services as well as increase its global market share.
It has been reported that Cycurion’s CEO, Jeremy Ellison, envisions an IPO date sometime in 2020 or 2021.
A key component of this merger is that it also includes investors from both firms who plan to purchase up to 10% equity stakes in the merged company.
If all goes according to plan, this would give SPAC Western Acquisition Ventures 30% ownership in Cycurion while the other 70% would belong to existing shareholders.
The total amount invested by all parties has not been disclosed yet but we can expect it be large given that they are hoping for significant return on their investment within 3-5 years after the IPO date.
This merger could be mutually beneficial as it provides each party with opportunities they might not have otherwise had access to on their own which include international opportunities and access to talent pools outside of their respective industries .
With less competition among firms, there should be an increase in innovation.
Cyber security experts believe that the combined company will be able to compete more aggressively against larger cybersecurity companies like Symantec Corporation (NASDAQ:SYMC) which has over $1 billion in annual revenue and would enable them to broaden their customer base globally.
Both companies’ management teams are optimistic about this merger because they believe it will enable them to better position themselves against competitors as well as expand into new areas of cyber security not currently being explored by either firm.
What’s Next?
This merger will create one of the largest cybersecurity firms in the world.
The combined company will be able to provide comprehensive cybersecurity solutions for any size organization.
Cycurion CEO Gary Zandstra said that he is pleased about the deal and looks forward to it being completed by 2019.
He also plans on expanding his services outside of North America over the next few years in order to break into other markets.
This deal will give Cycurion access to WAVS’s capital and improve its standing as a public company, which may be more attractive for investors and funders.
Cybersecurity has become an increasingly important industry due to recent large-scale data breaches like the Equifax hack.
Cybersecurity research firm MarketsandMarkets predicts that global cybersecurity spending will reach nearly $180B by 2020, making it a lucrative business opportunity.